(Editor’s Note: Today’s article is brought to you by our friends at Bright Horizons EdAssist Solutions, which manages education benefits available to over 5 million U.S. employees. Be sure to check out the case study in Chief Learning Officer magazine showing how State Farm uses educational benefits to improve their recruiting and retention efforts. Enjoy the article!)
According to LinkedIn’s 2019 Workforce Learning Report, 94% of employee say they would stay with a company longer if the organization invested in their learning. That’s a significant statistic. With unemployment at record lows, employee retention is important. The LinkedIn report raises the question: How can organizations invest in employee learning to improve employee retention? There are two types of learning programs: we could label them as internal and external.
Internal programs include technical training, management and leadership development, mentoring, etc. These are programs that are often developed and/or delivered by internal staff or contractors hired by the company.
Then, there are employee educational benefits, which I would put in the external category because the employee often chooses the subject and the place of delivery. Two of the most common educational benefits are student loan repayment programs, which we’ve talked about in the past, and tuition reimbursement, which is what I want to focus on today.
4 Key Elements of Employee Education Benefits
Before we dive into specifics about tuition reimbursement programs, let’s spend a few minutes talking about program design. Whenever we’re faced with designing any type of benefit, there are four key elements we should consider. This is absolutely true for employee education benefits.
ELEMENT #1 – Alignment with talent objectives. Employee benefits should help the organization recruit, engage, and retain the best talent. Benefits don’t have to be expensive to do that. They do need to be things that have value and employees want.
ELEMENT #2 – Communication to candidates and employees. In the Bright Horizons State of Education Benefits report, they draw a connection between program success and regular, proactive marketing of employee education benefits. Organizations need to remember that they cannot simply mention a benefit during an interview or in new hire orientation and think they’re done.
ELEMENT #3 – Relationships with strategic partners. Many employee benefits involve outside partnerships. Think health insurance, life insurance, gym memberships, food/snacks…you get the point. In the case of tuition reimbursement, we’re referring to both education providers like colleges and universities as well as third-party benefits administrators.
ELEMENT #4 – Attractive and available to all. I must admit that I saved this one for last and I want to spend a little extra time on it because I believe it’s the element that’s a big challenge for employers. What makes employee education benefits effective is inclusion and the way to be inclusive is through utilization. Bright Horizons shared with me that historically, across all industries, around 5% of employees make use of traditional tuition reimbursement programs.
In my opinion, when unemployment rates aren’t at historic lows, organizations might find 5% utilization to be a great metric. But when you think about the skills gap and employee retention challenges facing organizations today, then it might be time to reconsider.
A benefit doesn’t become effective by being created or documented. One could argue that a benefit that no one uses really doesn’t even exist. It becomes effective and inclusive when employees use it.
Now, I understand that an education benefit will not receive 100% utilization. However, if organizations want to reap the benefits that an education benefit offers, then utilization needs to be higher. Go back to the LinkedIn statistic I mentioned at the beginning of this article. If education benefits are linked to employee retention, then an increase in participation should drive a corresponding increase in retention.
6 Areas that Can Create a More Inclusive Education Benefit
If your organization doesn’t already offer a tuition reimbursement program, now might be a good time to consider one. And if you do offer one already, now might be a good time to audit your existing program to make sure it’s something that all employees would be interested in and able to use. Here are six areas to consider:
Program name. I know I’ve been using the word tuition reimbursement throughout today’s article, but it might be time for a change. It’s possible the word tuition is considered synonymous with going to college. And education is about much more than that. Maybe “education assistance” is a better way to describe the benefit.
Eligibility. According to Bright Horizons research, 74% of organizations only offer tuition reimbursement to full-time employees. As companies look to improve employee retention, they want to retain both full-time and part-time employees. Especially in industries with a large front-line workforce where part-time employees often move into full-time positions.
Waiting period. I was (happily!) surprised to see in the Bright Horizons research that almost 40% of organizations do not require a waiting period for employees to utilize tuition reimbursement. But that still means many organizations do. Companies need to weigh the financial cost of delaying access to the benefit against the results they’re missing out on.
Financial models. Asking employees to pre-pay for their education and wait for reimbursement can be a huge barrier to participation. Especially in industries with a large entry-level workforce. Companies might want to consider working with their program administrator to offer direct payments to education providers and remove the need for an up-front payments by employees.
Education. What I mean by education is whether the only goal is a college degree related to the employee’s current position. It could make sense to expand the types of courses allowed to include general education diplomas (GEDs), language courses, certifications and/or credentials, as well as degrees in subjects that are valuable to the organization but not directly related to an employee’s current career path.
Delivery models. Today’s technology allows individuals to learn from practically anywhere. And the quality of online education has significantly improved, with many new innovative high-quality education options. Organizations might want to consider allowing massive open online courses (aka MOOCs), exclusively online colleges, or even non-university online education providers like the Society for Human Resource Management (SHRM) to be included in educational assistance programs.
Use Employee Educational Benefits to Retain Talent
Despite all of the news about the rising cost of education, some newer education providers that are focused on adult learners can provide a great learning experience at a much lower cost than the traditional classroom-based approach.
Learning can be a way to attract, engage, and keep talent. Employee educational benefits are a way to provide and support learning opportunities. But those programs must meet the needs of all employees, not just a handful.
If you want to learn more about designing an inclusive modern educational benefit, join me and the EdAssist Solutions team on Wednesday, September 25, 2019 at 12n Eastern for a webinar on “Open Access: Effective Education Benefits for Frontline Workers”. And of course, if you can’t make it…sign up anyway and get the recording. Hope to see you there!
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